Ep 16: Test Your Knowledge – Financial Fact or Fiction

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How much of what you know or what you’ve heard is true when it comes to financial planning? Join us as we play a little game of fact or fiction when it comes to taxes, Social Security and investments.

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Show Notes

On today’s episode, we’re talking about financial fact or fiction. Find out what’s true when it comes to taxes, Social Security and investments.

Fact or Fiction? Your Social Security is taxable.

This is a fact, but it depends. Up to 85% of your Social Security can be taxable. Social Security can add into your taxable income. As of today, a person making between $25,000 and $34,000 can pay tax up to 50% for your Social Security. If you have $34,000 or more of combined income, you could pay up to 85% taxes on your Social Security.

It may help to wait until you retire to collect your Social Security. You don’t want to give a lot of it back to the government in taxes.

Fact or Fiction? Your taxes will likely be lower in retirement.

This one could be both. Where will tax rates be in the future? That’s an answer that no one knows. Some believe that there’s nowhere for taxes to go but up due to government spending.

You can also look at your taxable income in the future. You need to take into account required minimum distributions starting at age 72. Those RMDs can make you have more taxable income.

Fact or Fiction? Term life insurance is better than whole life insurance.

My personal opinion is that this is a fact. Whole life is pitched as an investment, but there is a cost to having that policy. You should get term insurance and invest your money elsewhere.

There are some hybrid policies that might make sense for you, because they provide a long-term care benefit. If you have a higher income or net worth, you might need a different approach.

Listen to the full podcast or use the timestamps below to jump to a specific section.

[2:16]USA Today article

[5:56] – Social Security is taxable?

[10:36] – Taxes lower?

[17:12] Term vs. whole life insurance

[20:26] – Medicare

[23:02] – Stocks to bonds

Thanks for checking out this episode. We’ll talk to you again soon.



“I find that a lot of people can get overly conservative as they go into retirement.”

-Scott Sierens